Khullar, who has one more year to go in the commerce ministry, is likely to resign soon to take over his new assignment, these people said, adding that the Prime Minister's Office has cleared his name.

A trained economist, Khullar will replace JS Sarma, whose three-year term at Trai has come to an end. Khullar will be taking over at a time Trai has been facing opposition from telecom companies over its proposal of a 13-fold hike in base prices for spectrum.

As Trai chairman, Khullar will have to walk the thin line between meeting industry demands and safeguarding consumer interests. Telecom companies, which have been reeling under increasing debt and dwindling margins, say if spectrum prices are revised, they will have no option but to recover them from consumers.

A 1975 batch IAS officer, Khullar is known for speaking his mind. At an inter-ministerial meet on inflation last year, Khullar said the RBI was reacting six months too late to monetary developments. He also made headlines for his suggestion that it would be better to export surplus foodgrain than let it rot.

Khullar was posted in the PMO from 1985 to 1990, serving under prime ministers Rajiv Gandhi and VP Singh. He was private secretary to Manmohan Singh during 1991-93, when he was initiating economic reforms as the FM. Khullar was also considered a frontrunner for the post of finance secretary last year.

Khullar spearheaded recent trade negotiations with Pakistan, which have made much progress.

On Sunday, the outgoing telecom regulator stuck to his formula for the auction of 2G airwaves and charging market rates for shifting operators to a new frequency.

Sarma's proposal to fix a base price of 18,111 crore for a pan-India licence is much higher than the 1,659 crore that telecom companies paid in 2008.